June 2023 : Outperformance in strong month, At the top again for the five year period

The month of June presented a blockbuster rally in the Indian stock market, both the market Indices NIFTY 50 and BSE Sensex to climb to their all-time highs. The month ended on the back of strong inflows from foreign institutional investors (FIIs), robust corporate balance sheets, moderating inflation and growth picking up coupled with expectations of a normal monsoon season, all of which bolstered the sentiment of market participants.

Sameeksha PMS gained 6.5% (net of all fees and expenses), and carved a strong outperformance (alpha) when compared to the benchmark BSE500TRI which gained 4.3%. 

It is worth reviewing key aspects of our performance as summarized below: 

	Particulars	Summary of our performance
1.	Fund performance on a Financial Year basis and Calendar Year basis  (Refer Table 1 and 2)	·      Delivered alpha (outperformance over the benchmark1) in six out of eight financial yearsincluding the current incomplete FY 24.    ·        Aggregate annual alpha over all the eight financial years ~ 45.3%    ·   Delivered alpha (outperformance over the benchmark1) in five out of eight calendar years including the current incomplete CY 23.    ·        Aggregate annual alpha over all the eight calendar years ~ 47.6%
2.	Aggregate portfolio returns as of June 30, 2023  (Refer Table 3)	·        From inception2 till June 30th 2023, Sameeksha PMS has delivered annualized alpha of 5.6%.   ·        For the five year   and three year periods ending 30th June 2023, Sameeksha PMShasdelivered  annualized alpha of 10% and 9% respectively.
3.	Risk Adjusted Ratios: Lower risk, Higher Return (Refer Table 5)	·      Our portfolio beta (0.9) has been lower than the benchmark, and our returns have been higher than the benchmark since inception, implying superior risk adjusted performance
4.	Fund performance on a rolling period basis (Refer Table 6, Table 7 and Table 8)	·        Five year rolling period since inception o   Alpha delivered 100% of the time (i.e 28 out of 28 observations) o   Median alpha ~ 7%   ·        Three year rolling period since inception o   Alpha delivered 96% of the time (i.e 49 out of 51 observations) o   Median alpha ~ 9%    ·    For the rolling five year periods (28 observations), we have been in the Top Quartile and Top Decile 100% of the time.    ·     For the rolling three year periods (51 observations), we have been in the Top quartile 92% of time and Top Decile 68% of the time.
5.	Returns of Individual portfolios (Refer Table 9)	·  As Sameeksha PMS does not follow a model portfolio approach, tracking individual client performance becomes more relevant.    ·      All the clients with an age of account from six months to seven years have realized annualized        alpha, with an average of 7.2%.    ·    Almost 75% of our assets under management can be attributed to clients who have a tenure of over seven years with us
6.	PMS Universe rankings (Refer Table 10)	·      Among multicap PMSes with AUM more than INR 100 crs asnof June 30th 2023, Sameeksha is ranked 1st out of 49 funds for five year period and 8th out of 66 PMSes for the three year period as per performance reported to PMS Bazaar. ·   Further, among multicap PMSes with AUM more than INR 100 crs as of June 30th, 2023, Sameeksha  is ranked 4th out of 122 funds for five year period performance among PMSes that disclose their name and performance on the website of Association of Portfolio Managers of India (APMI)
7.	Performance across pre, during and post Covid periods (Refer Table 11)	·       From inception (1st April 2016) till February 29, 2020 (Pre-Covid Period), delivered annualized alpha of 3.1%   ·        Between February 29, 2020 and June 30, 2022, (Covid Period) delivered annualized alpha of 8.3%   ·        Between June 30, 2022 and June 30 2023, (Post Covid Period) delivered annualized alpha of 9.3%

1. Benchmark is BSE500TRI 2. Inception is 01.04.2016

Aggregate Fund Performance on a financial year and calendar year basis

For the month of June, Sameeksha PMS has outperformed the benchmark BSE 500 TRI by generating 6.5% returns against the benchmark BSE500TRI returns of 4.3%.  Looking at our performance over the financial years (Table 1), we have outperformed our benchmark in six out of eight financial years (including the current incomplete financial year).  Key however is that the sum of outperformance of 55% in those six years far exceeds the sum of underperformance of 10%  in the remaining two  years. Furthermore, if we are able to sustain the outperformance achieved so far in this financial year for the rest of the year, it will become a streak of five consecutive years of generating alpha. 

1. Post Fees and Expenses, 2. Aggregate Portfolio  3. As of 30th June 2023

 

For the calendar year 2023 till date, we have positioned ourselves well by outperforming the benchmark BSE500 TRI by 9.2%. However, for the completed calendar year 2022, we have underperformed the benchmark BSE500 TRI by 6.8% (Table 2). This can be mainly attributed to the onset of the Ukraine-Russia war at the start of the calendar year and the ensuing global economic crisis. Nonetheless, we have taken corrective actions since then and we hope to have a good calendar year 2023. However, we have outperformed the benchmark in five out of eight calendar years and the sum of outperformance of 64% in five years far exceeds the sum of underperformance of 16%  in the remaining three  years.

1. Post Fees and Expenses, 2. Aggregate Portfolio  3. As of 30th June 2023

 

It is important to note that we delivered this alpha despite maintaining a median cash level of 13.3% across the eight financial years. Further, our PMS has delivered a substantial aggregate annual alpha of 43% over BSE500 TRI implying average alpha of 5% since inception (Table 3). 

1. Inception Date 1/4/2016 2.. Current financial year upto 30th June 2023

 

Aggregate Portfolio Returns over various time periods

 

It is important to note that we have maintained relatively higher levels of cash (13.3% on average over the entire period from inception) from time to time over the duration of managing the portfolio. Notwithstanding the same, from inception as well as over five and three years respectively, we have generated returns of 20.9%, 24.1% and 35.0% beating the benchmark BSE500 TRI returns of 15.3%, 13.9% and 26.4% respectively after fees and expenses. We have delivered strong returns relative to benchmark across various key time periods. (Table 4).  

 

1. Post Fees and Expenses, 2. Aggregate Portfolio , 3. Annualized For more than one year 4. From Inception (1/4/2016) till 30th June 2023

Risk Adjusted Ratios: Not all returns are the same: Higher Returns at lower Risk  

When compared on a risk-adjusted basis, our PMS shows an even stronger performance with a risk-adjusted alpha generation of 5.6% over the broader market benchmark since its inception. While our portfolio beta has been materially lower than our benchmark, our returns have been higher than the benchmark since inception, implying superior strong risk adjusted returns. 

Furthermore, other risk-adjusted returns – Sharpe ratio and Treynor ratio, are also significantly higher than the benchmark indices (Table 5).  

1. From Inception (1/4/2016) till 30th June 2023

Aggregate fund performance and ranking on a rolling period basis

Rolling returns are a more useful indicator of consistency in performance versus single period returns. For the rolling three year periods applicable to our entire operating history, Sameeksha PMS has delivered aggregate annualized alpha 96% of the times (49 out of 51 observations) ranging from 0.4% to 23%. For the rolling five year periods applicable, Sameeksha PMS has delivered aggregate annualized alpha 100% of the time (28 out of 28 observations) ranging from 5% to 10% (Table 6).

1. For this calculation, alpha is calculated over BSE500 TRI

For the rolling three year periods applicable to our entire operating history, we have been ranked among the multicap universe in the Top Decile 67% of the time (34 out of 51 observations) and in the Top Quartile 92% of the time (47 out of 51 observations). For the remaining 8% observations, we were ranked in the Second Quartile (Tables 7 and 8).  For the rolling five year periods applicable for our entire operating history, we have been ranked among the multicap universe in the Top Decile 100% of the time (28 out of 28 observations). 

(1). Top Decile = in top 10%,  outperformed 90% of the funds (2). 9th Decile = in top 20%, outperformed 80% of the funds

1). Top Quartile = in the top 25%, i.e. outperformed 75% of the funds (2) 2nd Quartile = in the top 50% i.e. outperformed 50% of the funds

 

Returns of Individual Portfolios 

 

Because we don’t follow model portfolio strategy, the performance of individual clients is far more important than overall portfolio aggregate returns  (Table 9). For investors who are with us for 3 years and more, Sameeksha PMS has returned a very substantial alpha with an average annualized alpha of approx. 8% for the three year period ending 30th June 2023. Similarly, for investors who are with us for 5 years or more, Sameeksha PMS has returned substantial alpha with an average annualized alpha of approx. 11% for the five year period ending 31st May 2023.  The table below shows the average annualized returns and alpha over different periods of time of all the clients as on 31st June 2023. 

1.S&P BSE 500 TRI   2. As on 30th June 2023  3. Age of Accounts rounded towards the nearest half year  4. Average rounded to the nearest decimal place.  5.TWRR Post fees and expenses.

Performance within the PMS Universe

We continue to maintain our top rankings both within the multicap PMS universe as well as the entire PMS universe for key periods of three and five years. The multicap PMS universe rankings are more relevant to us since we follow the multicap strategy.

In the interest of a fair comparison, we present our rankings among those multicap PMSes with AUM more than INR 100 crs. Within this universe, we are 1st out of 49 PMSes for the five year period  and  8th out of 66 PMSes for three year period, highlighting our superior performance over the long term periods (Table 10). Among the multicap universe (considering all AUM), we are consistently ranked in the Top Decile for the five year period for all 28 out of 28 observations reflecting well on the consistency of our performance. 

Table 10: Comparison with PMS Multicap Universe as of 30th June 2023
Fund or Category / Returns Generated 1 2	1 year (%)	2 year (%)	3 year (%)	5 year (%)
Sameeksha PMS	33.9	13.5	35.0	24.0
Multicap Universe Average	27.1	11.0	27.4	13.7
Decile Rank within the Multicap Universe	9th Decile	7th Decile	9th Decile	Top Decile
Percentile Rank within the Multicap Universe	Top 16%	Top 30%	Top 11%	Top 1%
Rank within the Multicap Universe 3 4 5 6	13th out of 77	23rd out of 74	8th out of 66	1st out of 49

1. Post fees and expenses 2. Aggregate Portfolios 3. 77 Funds 4. 74 Funds 5. 66 Funds 6. 49 Funds

 

Performance Of PMS Over The Covid Timeline (Pre, During, And Post)

 

The Covid Pandemic induced significant volatility in the equity markets. Hence, it is useful to look at the performance across three time slices : Pre Covid, During Covid and Post Covid. Sameeksha PMS has outperformed the benchmark across all of these three time periods with meaningful alpha (Table 11). This consistency of performance may be an important factor in comparing us with the other funds. 

 

1. Post fees and expenses 

 

Cumulative Performance versus the benchmark

Sameeksha’s outperformance over its benchmark has continued to widen positively over the years. An investment of Rs. 100 with us since inception (April 2016) would have grown to Rs. 395, far outpacing what one would have earned by investing in a fund that achieved benchmark returns (Figure 1). 

Analyzing the sector performance during the month

During the month, Sectors that showed growth include Healthcare, Auto & Ancillaries and Infrastructure. For Sameeksha PMS, the Healthcare, Diamond & Jewellery, and  Aviation were outperformers compared to the benchmark. However, due to our lack of exposure towards Auto & Ancillaries we missed out on participating in the upturn. Below is the attribution analysis for the month of June 2023 (Table 12).   

1. BSE500TRI

 

Disclaimer – The information contained in this update is provided by our fund accounting platform and is not audited.